On Wednesday a Federal judge granted Verizon’s request for summary judgement, shooting down all of ASCAP’s claims that mobile phone providers should pay public performance royalties for ringtones they sell.
The sale of ringtones already requires the seller to pay mechanical royalties to the publisher (songwriter) and recording artist, just like MP3s or CDs.
ASCAP claimed that when the ringtone is downloaded by a customer or plays when a mobile phone rings it’s a public performance. Because of that they were asking for additional royalties.
The short version of Judge Denise Cote’s ruling is that there is no public performance under US copyright law so there can be no infringement of that right.
The first claim Judge Cote addressed was the transmission of a digital file from mobile provider to the customer’s phone. She pointed out “ASCAP does not contend… that a Verizon customer can actually listen to a ringtone while she is downloading it; it acknowledges that the ringtone cannot be played before the transmission is concluded”
In other words a data download isn’t a performance. She also concluded that because the transmission is sent to a single individual it’s not public by definition.
Expect these points to be revisited in the pending case by ASCAP and BMI over downloads from online music stores like iTunes.
But what about when the phone rings? That was an even easier question to answer.
She wrote “customers do not play ringtones with any expectation of profit. The playing of a ringtone by any Verizon customers in public is thus exempt under 17 U.S.C. § 110(4) and does not require them to obtain a public performance license.”
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Result for: music stores
HMV, Woolworths, 7digital, Digitalstores, Tescodigital, Tunetribe, and Play.com have all agreed to promote a new “MP3 compatible” logo that they hope will raise the profile of the open MP3 music format and inform users on what they can do with their DRM-free downloads.
The logo should also help consumers identify legal music stores from P2P.
The Entertainment Retailers Association created the logo and says it will emphasize that MP3s can be played in all media players.
7digital’s Ben Drury added that digital sales “have been booming because users love the freedom of MP3″.
“The beauty of an MP3 file is that once you have bought it, you don’t need to be a computer genius or a lawyer to make it work and you are not locked in to a relationship with a single retailer or hardware manufacturer,” he said.
The BPI is also standing behind the new proposal.
“This logo will not only help give consumers confidence that the music files they are buying will play on a wide range of devices, but will also help them know that they are legal and that artists are getting paid,” noted Geoff Taylor, BPI chief executive.
Result for: music stores
According to a study by MultiMedia Intelligence, 50 percent of all phones shipped worldwide will be music-capable by 2011. The report also estimates that the Cell phone market itself will remain flat in terms of growth with about 950 million phones being sold in 2011, same like estimates for 2008.
The mobile music business was $6 billion USD for 2008 and MMI chief researcher Frank Dickson says that music is one of the key drivers “behind future success for cellular carriers.”
The study comes at a point when carrier independent music stores are becoming more and more commonplace. Apple offers its iTunes store through the iPhone’s wireless and Nokia is introducing its Nokia Music Store worldwide.
